TracFone Straight Talk Plans are Here!And then came TracFone Straight Talk!So what's so interesting about the new Straight Talk plans being added to the TracFone prepaid cellular portfolio? Well, these plans consist of monthly plans, one at $30 for 1,000 min, 1,000 text messages, and 30MB of data, and a second one at $45, which includes unlimited voice and text messages. TracFone's Straight Talk plans are a complete divergence from their classic low cost pay-as-you-go plans. I expect that in this case starting a new brand specifically for these plans was an easy (and wise!) decision. These plans are extremely competitive, and you'll see people advertising the unlimited plan focusing on the fact that it's on Verizon's network. Why? Well, the TracFone Straight Talk brand is new and doesn't have much brand equity (i.e. people don't really associate it with anything...yet), and TracFone is known for its super cheap value plans. On the other hand, "$45 unlimited, no contract plan on the Verizon network" speak volumes!
Why a Trial? We'd all like to get our hands on this type of value, however, unfortunately, it's not widely available yet. Why a trial instead of a full market launch is an easy question to answer. TracFone 
needs to see whether the
business model is sustainable. Although we'd all like to see
super cheap unlimited plans, the reality is that carriers have real
costs to deliver services, and a lot of the variable/unknown expense
comes to
how many minutes people actually end up using on a monthly basis.
There's typically a period, often referred to as the "honeymoon period," when people first get an unlimited plan. They use the heck out of the phone because it's free/included. This usage can stay this way for several weeks or longer. Then people tend to settle in on their normal calling habits. Although they'll likely settle in on more minutes than they used to use before they got an unlimited plan, it tends not to be nearly as high as their usage during the honeymoon period. UPDATE - In October 2009, it was announced that Straight Talk will be rolled out to all Walmart stores; i.e. the trial is over! Risky Business! The challenge is knowing what that average will ultimately be, because it drives the net cost to the carrier. Simply, they're getting a fixed amount of money ($45 for TracFone Straight Talk) from you each month. As you use more minutes, their profit declines. The more you stack on the minutes, the more the carrier's profit declines. Eventually it becomes unprofitable. And don't think that just because a company is large, or has been around awhile, that they can't go bankrupt. The crashing U.S. economy of 2008-2009 was a good lesson there ;-). There's also almost always a small percentage of people (let's call it 1-5%) who use so many minutes, WAY above what the average person uses, that they can actually ruin the cost structure (i.e. overall average) for the entire business/product. That's why you'll see a lot of "reasonable usage" clauses in a lot of unlimited plans, whether for voice or mobile broadband. This allows carriers to disconnect customers who are abusers. Although a lot of people complain about this type of hidden language/clause, the reality is that 95-99% of customers will never be impacted by it, but it does help to allow carriers to continue offering good value to most people. If they couldn't get rid of these abusers, they'd either have to increase the price for everyone, or shut down their business altogether. Conclusion So, TracFone Straight Talk is a trial because TracFone needs to figure out how many minutes their customers will end up using. Once they determine that, which usually takes 6-12 months, they'll have a better understanding as to whether their pricing is sustainable (i.e. profitable) to allow them to continue rolling out the program. And even then there's still risk, because as you roll out to new markets, you get different types of customers, who in turn can change these average numbers. It will definitely be interesting to see what happens with this Straight Talk plan. Hopefully at the end of the day it will be sustainable, drive additional competition, and ultimately customers will benefit!
Return from TracFone Straight Talk to TracFone Prepaid Cellular
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